Action continues to be a retail star with superior growth
The Dutch discount retailer Action reported (via 3i, the leading investor in the company) another quarter of solid growth. As discussed previously (for 2022 & Q3/2023), Action is one of Europe's most significant retail success stories.
The growth strategy for Action seems to work fantastically as the company is capitalising on the traditional discount retail strategy with many DIY and home products.
The company has stormed through Europe. This year, it jumped past the 10 billion € and 11 billion € marks in revenue. The revenue growth for the full year 2023 was a whopping +27,8%. The growth is remarkable considering the company operated in 2022 at an 8,9 billion € revenue level.
With 303 new stores, the company took its store estate to 2,566 stores across 11 countries in continental Europe, ranging from Poland and Slovakia in the east to Spain and Italy in the south.
Since the pre-pandemic 2019, Action has more than doubled its revenue, a feat not even many European e-commerce companies can report.
The growth has come at a very healthy operating margin. Action reported a fourth consecutive year of improving operating margins. For 2023, the operating profit increased by 34% to 1,6 billion €. The operating margin stood at 14,3%.
Since 2019, Action's operating profits have grown almost threefold.
The growth rate seems to be slowing down at least slightly from 2022. The Like-for-Like (LfL) growth decreased from 18,1% to 16,7% in 2023. For the last quarter of the year, LfL growth was 11,4%. According to the 3i results report, LfL growth was mainly driven by the transaction volumes, whereas previous growth was probably also driven by inflation.
Action continues to grow as this year, the company opens its first stores in Portugal.
The company also doubles down on the low-price image. Discounter mindset (small assortment, no-frills stores, low marketing spend…) and low prices are winning strategies in these times.
The company CEO also stated this.
“Our growth in 2023 shows how relevant the Action formula is to our customers. They clearly like what we offer: daily necessities and inspirational products that make everyday life easier or more enjoyable, all at the lowest price. Lowest prices are in our DNA. Last year, we even managed to reduce the prices of more than 2,500 products, to the satisfaction of our customers.”
